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INCOME TAXES | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 19:INCOME TAXES A.Tower Statutory Income Rates Substantially all of Tower’s existing facilities and other capital investments made through 2012 have been granted approved enterprise status, as provided by the Law for the Encouragement of Capital Investment in Israel (“Investments Law”). Tower, as an Israeli industrial company located in Migdal Ha’emek, may elect the Preferred Enterprise regime to apply to it under the Investment Law. The election is irrevocable. Under the Preferred Enterprise regime, Tower’s entire preferred income is subject to the tax rate of 7.5%. Any portion of Tower’s Israeli taxable income that is not eligible for Preferred Enterprise benefits, if at all, shall be taxed at the regular corporate tax rate of 23%. B.Income Tax Provision The Company's provision for income taxes is affected by income taxes in a multinational tax environment. The income tax provision is an estimate determined based on current enacted tax laws and tax rates at each of its geographic locations, with the use of acceptable allocation methodologies based upon the Company’s organizational structure, operations and business mode of work, and result in applicable local taxable income attributable to those locations. The Company’s income tax provision is consisted of the following for the years ended December 31, 2021, 2020 and 2019:
Details |  | 2021 |  |  | 2020 |  |  | 2019 |
Current tax expense: |  |  |  |  |  |  |  |  |
Foreign |  | $ | 13,504 |  |  | $ | 2,232 |  |  | $ | 1,013 |
Deferred tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Local |  |  | 2,518 |  |  |  | 8,481 |  |  |  | 7,098 |
Foreign |  |  | (14,998 | ) |  |  | (5,314 | ) |  |  | (5,163 | )
Income tax expense: |  | $ | 1,024 |  |  | $ | 5,399 |  |  | $ | 2,948 |
Details |  | 2021 |  |  | 2020 |  |  | 2019 |
Profit (loss) before taxes: |  |  |  |  |  |  |  |  |
Domestic |  | $ | 166,273 |  |  | $ | 100,145 |  |  | $ | 103,432 |
Foreign |  |  | (11,174 | ) |  |  | (11,457 | ) |  |  | (12,411 | )
Total profit before taxes |  | $ | 155,099 |  |  | $ | 88,688 |  |  | $ | 91,021 |
C. Components of Deferred Tax Asset/Liability The following is a summary of the components of the deferred tax assets and liabilities reflected in the balance sheets as of the respective dates (*), as of December 31, 2021 and 2020:
Details |  | 2021 |  |  | 2020 |
Deferred tax asset and liability - long-term: |  |  |  |  |  |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforward |  | $ | 77,586 |  |  | $ | 72,658 |
Employees benefits and compensation |  |  | 5,366 |  |  |  | 6,813 |
Accruals and reserves |  |  | 7,863 |  |  |  | 3,312 |
Research and development |  |  | 20,633 |  |  |  | 18,179 |
Others |  |  | 3,737 |  |  |  | 3,453 |
|  |  | 115,185 |  |  |  | 104,415 |
Valuation allowance, see Note 19F below |  |  | (11,644 | ) |  |  | (10,745 | )
Deferred tax assets |  | $ | 103,541 |  |  | $ | 93,670 |
Deferred tax liabilities - long-term: |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | (72,678 | ) |  | $ | (76,136 | )
Others |  |  | (1,114 | ) |  |  | (1,018 | )
Deferred tax liabilities |  | $ | (73,792 | ) |  | $ | (77,154 | )
Presented in long term deferred tax assets |  | $ | 53,526 |  |  | $ | 57,802 |
Presented in long term deferred tax liabilities |  | $ | (23,777 | ) |  | $ | (41,286 | )
(*) Deferred tax assets and liabilities relating to Tower for the years 2021 and 2020 are computed based on the Israeli Preferred Enterprise tax rate of 7.5%. D.Unrecognized Tax Benefit A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Details |  | Unrecognized tax benefits |
Balance as of January 1, 2021 |  | $ | 15,314 |
Additions for tax positions of current year |  |  | 624 |
Reduction due to statute of limitation of prior years |  |  | (8,175 | )
Balance as of December 31, 2021 |  | $ | 7,763 |
Details |  | Unrecognized tax benefits |
Balance as of January 1, 2020 |  | $ | 15,113 |
Additions for tax positions of current year |  |  | 624 |
Reduction due to statute of limitation of prior years |  |  | (423 | )
Balance as of December 31, 2020 |  | $ | 15,314 |
Details |  | Unrecognized tax benefits |
Balance as of January 1, 2019 |  | $ | 14,783 |
Additions for tax positions of current year |  |  | 778 |
Reduction due to statute of limitation of prior years |  |  | (448 | )
Balance as of December 31, 2019 |  | $ | 15,113 |
E.Effective Income Tax The reconciliation of the statutory tax rate to the effective tax rate for the years ended December 31, 2021, 2020 and 2019:
Details |  | 2021 |  |  | 2020 |  |  | 2019 |
Tax expense computed at statutory rates, see (*) below |  | $ | 35,673 |  |  | $ | 20,398 |  |  | $ | 20,935 |
Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit |  |  | (24,683 | ) |  |  | (15,046 | ) |  |  | (16,396 | )
Change in valuation allowance, see Note 19F below |  |  | 899 |  |  |  | 3,479 |  |  |  | 1,432 |
Permanent differences and other, net |  |  | (10,865 | ) |  |  | (3,432 | ) |  |  | (3,023 | )
Income tax expense |  | $ | 1,024 |  |  | $ | 5,399 |  |  | $ | 2,948 |
(*) The tax expense was computed based on regular Israeli corporate tax rate of 23%. F.Net Operating Loss Carryforward As of December 31, 2021, Tower had net operating loss carryforward for tax purposes of approximately $800,000 which may be carried forward indefinitely. The future utilization of Tower US Holdings’ federal net operating loss carryforward to offset future federal taxable income is subject to an annual limitation as a result of ownership changes that have occurred. Additional limitations could apply if ownership changes occur in the future. TSNB had two “change in ownership” events that limit the utilization of net operating loss carryforward. The first “change in ownership” event occurred in February 2007 upon Jazz Technologies’ acquisition of TSNB. The second “change in ownership” event occurred in September 2008, upon Tower’s acquisition of TSNB. TSNB concluded that the net operating loss limitation for the change in ownership which occurred in September 2008 will be an annual utilization of approximately $2,000 in its tax return. As of December 31, 2021, Tower US Holdings has federal net operating loss carryforward of approximately $83,000 of which approximately $66,000 does not expire and is subject to a taxable income limitation of 80%, and the remaining federal tax loss carryforward of $17,000 will begin to expire in 2022, unless previously utilized. As of December 31, 2021, Tower US Holdings had California state net operating loss carryforward of approximately $11,000. The state tax loss carryforward will begin to expire in 2029, unless previously utilized. Tower US Holdings recorded a valuation allowance against the deferred tax asset balances for its federal and state net operating loss carryforward. As of December 31, 2021, and 2020, TPSCo had no net operating loss carryforward. G.Final Tax Assessments Tower possesses final tax assessments through the year 1998. In addition, the tax assessments for the years 1999-2016 are deemed final. Tower US Holdings files a consolidated tax return including TSNB and TSSA. Tower US Holdings and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple states. In general, Tower US Holdings is no longer subject to U.S. federal income tax examinations before 2018 and state and local income tax examinations before 2017. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carryforward amount. On March 27, 2020, the CARES Act was signed. The CARES Act provided numerous tax provisions and other stimulus measures, including but not limited to temporary changes regarding the prior and future utilization of net operating losses. Under the provisions of the CARES Act, Tower US Holdings received in 2020 a $2,100 income tax refund from carrying back federal net operating losses and a $1,100 refund of its minimum tax credits. TPSCo possesses final tax assessments through the year 2020.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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